Hillary Clinton will next month become the highest level Western official to visit Burma in decades as Washington intensifies its effort to encourage "flickers of progress" from the military regime.

President Barack Obama telephoned Aung San Suu Kyi, the opposition leader and fellow Nobel Peace Prize winner from Air Force One to get her blessing for a visit by the US Secretary of State, the first in more than 50 years.

In a conversation that was unthinkable just six months ago, US officials said that "the president was very struck by both her substantive observations and her warmth".

"They reviewed the progress that has been made in Burma, including her release, her dialogue with the government, the release of some political prisoners, and legislation that could open the political system further," said the official.

There were a lighter moments too, as Ms Suu Kyi asked Mr Obama how Bo the dog was doing, and mentioned that she was a dog owner too.

En route to a summit in Indonesia, where he will encounter Thein Sein, Burma's military-backed president, Mr Obama said: "For decades Americans have been deeply concerned about the denial of basic human rights for the Burmese people."

He said that the current environment in Burma was a rare opening that could help millions of people "and that possibility is too important to ignore".

"After years of darkness, we've seen flickers of progress in these last several weeks," he added.

Ms Suu Kyi's National League for Democracy (NLD) said it would re-register as a political party and contest coming by-elections after boycotting an election last year poll.

"We have to take part in all constituencies. Why? The NLD has not worked as a political party for a long time so we need to practice as a political party again," Ms Suu Kyi said.

The NLD won a landslide victory in 1990 but the ruling junta never allowed the party to take power. Ms Suu Kyi was placed under house arrest throughout and remained there for most of the subsequent 20 years.

Burma's next election was not held until November last year, and the NLD boycotted it – mainly because of rules that would have forced it

to expel imprisoned members.

Now aged 66, Ms Suu Kyi hinted that she would contest one of the 48 by-election seats available. No polling dates have been announced.

"If I think I should take part in the election, I will. Some people are worried that taking part could harm my dignity. Frankly, if you do

politics, you should not be thinking about your dignity," she told senior party members in Rangoon.

"I stand for the re-registration of the NLD party. I would like to work effectively towards amending the constitution. So we have to do

what we need to do."

Burma is subject to wide-ranging trade, economic and political sanctions from the US and other Western nations, enforced in response to brutal crackdowns on pro-democracy protesters in 1988 and 2007 and its refusal to hand power to the NLD after the 1990 elections.

Nyan Win, a close lieutenant of Ms Suu Kyi, said Mrs Clinton's arrival would be a welcome and "crucial" demonstration of support for Burma's reformers.

The Obama administration sees Mrs Clinton's visit as a sign of success for its Burma policy, which focused on punishments and incentives to push the military rulers to improve dire human rights conditions. The US imposed new sanctions but made clear it was open to better relations if the situation changed.